RMG sector gets addl Tk 2,825cr as incentive

A file photo shows workers sewing clothes at a readymade garment factory on the outskirts of Dhaka. Country’s readymade garment sector has got more facilities from the government as finance minister AHM Mustafa Kamal on Thursday proposed an allocation of additional Tk 2,825 crore as cash incentive for the sector for the next financial year of 2019-20. — New Age photo

Country’s readymade garment sector has got more facilities from the government as finance minister AHM Mustafa Kamal on Thursday proposed an allocation of additional Tk 2,825 crore as cash incentive for the sector for the next financial year of 2019-20.The finance minister made the proposal while delivering his speech on the proposed national budget for the 2019-20 fiscal in the Jatiya Sangsad.Bangladesh Garment Manufacturers and Exporters Association president Rubana Huq said they had demanded 5 per cent cash incentive for all RMG exporters while the budget proposed 1.0 per cent and considering the existing challenges of the RMG sector the amount was insufficient.She said that Tk 14,000 crore was required for 5 per cent incentive but the government proposed an allocation of Tk 2,825 crore.Rubana, however, said that the allocation of Tk 2,825 crore was highest in last 10 years the RMG sector was receiving.However, the tax at source on RMG export would be reinstated at 1 per cent.The government reduced the tax rate to 0.25 per cent through a statutory regulatory order, which would expire on June 30 this year.As Mustafa Kamal had been feeling unwell, prime minister Sheikh Hasina presented the remainder of the budget speech at the national parliament.Mustafa Kamal said that the government had kept on providing all types of facilities including existing incentives to the RMG sector.‘Currently, four sectors of readymade garments are receiving export incentives at 4 per cent. I propose to provide an export incentive of 1 per cent in the next fiscal year to the rest of the sectors of readymade garments,’ the finance minister said.Mustafa Kamal also proposed continuation of reduced corporate tax rate for the RMG and textile sectors.The apparel sector is now enjoying corporate tax at the rate of 12 per cent while the rate is 10 per cent for the green factories.At the same time the textile sector has been enjoying reduced 15 per cent tax rate for a long period of time, which would expire on June 30 this year.‘Considering the contribution of these sectors to our economy, particularly in boosting export and generating employment opportunities, I propose to continue this provision of reduced rate of taxes for these sectors,’ the finance minister said.